- YOY inflation remained stable at 2.4% (matching expectations and the lowest level since May 2025).
- Core inflation remained unchanged at 2.5% annually, a multi-year low.
- Monthly CPI rose 0.3%, primarily driven by Shelter (0.2% increase), Gasoline (0.8% increase), and Food (0.4% increase).
- Future inflation releases (especially April’s) will be significantly impacted by the surge in oil prices stemming from the Middle East conflict (Israel, Iran, US). The US Dollar Index (DXY) rose, continuing its upward trend, and remains swayed by developments in the Middle East.
The US annual inflation rate remained stable at 2.4%, holding firm from January and matching market expectations. This figure represents a continued cooling of the economy, maintaining the lowest inflationary levels seen since May 2025.
Monthly Fluctuations and Core Trends
On a month-to-month basis, the Consumer Price Index (CPI) edged up slightly by 0.3%, a minor acceleration from January’s 0.2% increase. The primary contributors to this monthly rise were:
- Shelter: Increased by 0.2%, serving as the largest contributor to the monthly gain.
- Gasoline: Rose by 0.8%.
- Food: Increased by 0.4%.
While the headline number (YoY) stayed flat, the underlying drivers saw some shifts: energy prices rebounded to a 0.5% increase, fueled by rising natural gas costs and a significant spike in fuel oil, which offset a moderating decline in gasoline prices.
Conversely, the cost of used cars and trucks saw a steeper drop than the previous month, while inflation for essential categories like food and shelter held steady at 3.1% and 3% respectively.
Meanwhile, core inflation, which strips out the volatile food and energy sectors to provide a clearer look at long-term trends remained unchanged at an annual rate of 2.5%. This marks a multi-year low, hovering near levels not seen since 2021.
On a monthly basis, core prices rose by a modest 0.2%, showing a slight deceleration from the previous month and signaling that underlying price pressures remain largely in check.
Outlook moving forward
Today ‘s CPI print for lack of a better term is ‘out of touch’ with reality. The reason i say this is that the surge in oil prices and concerns around its impact on inflation all began on February 28.
Thus any shocks to be felt on the inflation front may only start to filter through in next month’s release, which should be a blockbuster one. The release in April could potentially make or break the case for rate cuts globally.
If the war drags on to that date between Israel, Iran and the US, the impact may be huge on energy prices. Thus the longer the war drags on the larger the impact on inflation and thus rate cut expectations.
For now, even this week’s PCE data may take a backseat and not have a huge impact on markets. Not until some form of clarity on the Middle East situation comes to fruition.
Market impact & US dollar index (DXY) reaction
The data was not really a huge surprise and heading into the release the print was highly unlikely to have a major impact on markets.
The DXY did however continue on its upward trajectory which began yesterday.
The Dollar continues to sway based on developments in the Middle East. A daily candle close is still needed above the 99.57 handle if the bullish momentum is to continue.
Immediate support rests at 98.72 before the 100 and 200-day MAs come into focus.
If acceptance above the 99.57 handle is achieved, then the psychological 100.00 level comes into focus.
US Dollar Index Daily Chart (Left)/15M Chart (Right), March 11, 2026
Source: TradingView
